Action on bonuses is pro business, says Miliband

Ed Miliband: It is pro business to bring an 'end to the something-for-nothing culture which has damaged our economy'

Ed Miliband has accused the Government of defending the interests of the "irresponsible few" in the row over City bonuses.

The Labour leader dismissed suggestions he was "anti-business" for tackling excessive pay, insisting he was standing up for the wider economy.

His comments came after Chancellor George Osborne bucked the current political debate by defending the principle of "rewards for success" in a speech to business leaders.

Mr Osborne warned that the row over bonuses and pay threatened to undermine jobs and prosperity provided by a free market economy.

"George Osborne says that action to tackle big bonuses is 'anti-business'. It is not," Mr Miliband said in a speech at Sheffield University last night.

"It is pro-business to demand responsibility at the top and an end to the something-for-nothing culture which has damaged our economy in the financial crisis at every level, wrecked businesses and left everyone else squeezed.

"By defending an unreformed bonus culture, this Government confuses the interests of the economy as a whole with the interests of an irresponsible few."

Giving the inaugural lecture at the Sheffield Political Economy Research Institute, Mr Miliband said banks needed to be "lending to small business rather than handing out big bonuses".

And he warned private sector banks that they, as well as the state-backed Royal Bank of Scotland and Lloyds Banking Group, had a responsibility to show restraint on bonuses as all banks were effectively underwritten by the taxpayer.

Barclays is to publish its annual profits and total bonus pot for 2011 today.

"Some argue that it is no business of the public what bonuses banks pay," Mr Miliband said."I fundamentally disagree, because even banks which are not publicly owned implicitly benefit from a taxpayer guarantee, to the tune of billions of pounds.

"That is why we need change in the bonus culture across all our banks, and we need responsibility from top to bottom across our society.

"Across the economy we need executives to recognise that exceptional rewards should only be for exceptional performance.

"Tackling excessive executive pay and bonuses is not an end in itself but a necessary first step towards a bigger change in our economy in which people get fair rewards for their contribution at every level of society."

Mr Osborne used a speech to the Federation of Small Businesses on Wednesday to defend the principle of "rewards for success".

He said: "Of course rewards for failure are unacceptable - and those who believe in the free market are the first to say so.

"But a strong, free market economy must be built on rewards for success. There are those who are trying to create an anti-business culture in Britain - and we have to stop them. At stake are not pay packages for a few but jobs and prosperity for the many."